Wednesday, May 6, 2009

Payday Lending and Evangelicals

Here in Southside Virginia, we have a problem with pay-day and car title lenders. As I have noted before, in Collinsville, the small town grafted onto Martinsville, there are 13 pay-day/car title lenders within a two mile stretch of road. With near 400% interest rates, this service is both predatory, unconscionable, and unbiblical.

In a shocking study by Johnathon Randon, a law student at the University of Iowa, found that evangelical ministers are struggling to find a coherent message against payday lending. As such, evangelicals are more likely to use payday lending services than others. Money quote:
What he found was that most ministers and churches preached the Bible messages of living within one's means and an economic version of the Golden Rule: treat others in financial matters as you wish others to treat you.
In his research, Landon found that ministers and religious organizations criticize payday lenders for usury, which is condemned many times throughout both Old and New Testaments. Ministers whom Landon talked to called them "loan sharks" and "piranhas" who prey on the poor and uneducated.

Ministers, however, are preaching and educating their congregations against payday lenders, yet, there is a disconnect between the pronouncement and the reception of the message. He does offer some thoughts on this disconnect:

Landon said the ministers offered several possible reasons for this contradiction. Some pointed to a poor education system in the South that leaves many vulnerable to economic exploitation, while others said their congregants' conservative political and economic beliefs lead them to put more faith in free markets than in Biblical teachings.

"Too many Christians let political views guide their biblical interpretation and not the other way around," one minister told Landon.

And then there's the challenge that ministers have faced for ages on a range of moral and ethical topics -- many churchgoers aren't interested in practicing from Monday to Saturday what they hear on Sunday. What happens in church stays in church.

It is important to state that Randon's research shows that payday lending is concentrated in the South, a region dominated by evangelicalism.


Truth in Lending said...

I don't see a correlation between payday lending and evangelicals but I do see a correlation between payday lending and lack of morality. A recent report and story found that payday lenders are targeting our poorer communities with their wealth-destroying loans.
By Sara Griffith and Josephine Varnier

"Payday lending customers encompass a range of people, but lenders cluster in specific geographic locations. Virginia’s lower-income Zip codes have more payday loan locations than higher-income Zip codes, according to analysis by Capital News Service."
Overall, Virginia had about eight payday loan stores for every 100,000 people. The state’s median household income was $46,677, and 9.6 percent of Virginians lived in poverty,
Areas with the most payday lenders per capita were much poorer than the state as a whole:
Portsmouth had about 25 payday loan stores per 100,000 people. The area had a poverty rate of 16.2 percent.

Norfolk had about 20 payday loan stores per 100,000 residents. Its median household income was $25,827, and its poverty rate was 18 percent.

Southwest Virginia had about 15 payday lenders per 100,000 residents. Its median household income was $31,864, and its poverty rate was 19.3 percent."

"But payday lending operations maintain that they are not targeting specific groups. That’s an allegation in which the facts of the matter don’t match,” Fulmer (spokesman for Advance America) said.
Well too bad for Fulmer but the facts do match the allegation….

Anonymous said...

yeah, payday lending is immoral but getting your parishioners to tithe 10% is somehow sanctified by god.